Technical Outlook: Sterling is caught in a tight range just below slope resistance heading into the Bank of England (BoE) interest rate decision tomorrow and although the broader outlook remains weighted to the topside, the immediate advance is vulnerable while below this slope near-term.

Interim daily support rests at 1.2828/54 with a break below the median-line extending off the March high needed to suggest a more significant correction is underway. Such a scenario targets support objectives at 1.2755 & 1.2675-1.2706– both would be levels of interest for exhaustion / long-entries. That said, we’ll be on the lookout fora dip into structural support with a breach higher targeting subsequent topside targets at 1.3060 & 1.3121.

Notes:A closer look at price action highlights a well-defined weekly opening range in Cable with and we’ll be looking for a break of this immediate range for guidance heading into the release. A third of the daily average true range (ATR) yields profit targets of 28-32pips per scalp. Note that I’ve been stretching out profit targets (a third of the daily range as opposed to a quarter) to account for the low volatility environment- and ultimately to be better positioning for the inevitable surge.

A summary of IG Client Sentiment shows traders are net-short GBPUSD- the ratio stands at -1.5 (40% of traders are long)- bullish reading

Retail traders have been net-short since April 12- Cable is up 4.5% since

Long positions are 5.6% higher than yesterday but 5.6% lower from last week

Short positions are 0.3% lower than yesterday and 2.4% lower from last week

While broader sentiment continues to point lower in sterling, the recent pullback in -positioning as price approaches technical resistance suggests the immediate upside bias is vulnerable heading into the Super Thursday (BoE).